Editorial: Put yourself and consumers first

The FSA&#39s spin-doctored announcement on the axing of polarisation has as its heading: “Consumers put first in proposed reform of financial advice”.

This is simply not true. A more accurate heading would be “Consumers put last as overwhelming demand for IFAs ignored”.

The lunatics have taken over the asylum but most IFAs realised that long ago.

The changes will confound consumers, with possibly five or six levels of adviser. Better than best is not reformed, it is dumped and providers and IFAs are effectively encouraged to seek investment from providers. The dash for distribution can only accelerate, with multi-ties sapping entrepreneurship from distribution.

The regulator says commission bias exists although it exonerates panels from the accusation that they are de facto multi-ties. Intriguingly, it also says the 1 per cent world has excluded consumers from advice.

This is not a death warrant for IFAs. On the commission reform, IFAs can take a fee from the commission and rebate the rest. It may be the one sensible move but only if multi-ties, now known as distributor firms, are not given a regulatory licence to fleece consumers. It is also essential that those who wish to remain independent are allowed time to adapt. Finally, the new proposals bizarrely lack any explanation of how the new system would avoid a repeat of Equitable Life or pension misselling.

Our position, as always, is that we will not condemn readers who choose to multi-tie but we believe that as many people as possible should get access to IFAs.

In the coming months of turmoil, Money Marketing has this advice for its readers: Be selfish on behalf of two groups of people – yourselves and your clients.

Recommended

A consultant at the heart of the FSA&#39s polarisation rev-iew has hit out at the pla-nned regime, saying it could have significant adv-erse impact on both consumers and the industry.Cap Gemini Ernst & Young vice-president Shaun Crawford says the proposals are in danger of recreating many of the present flaws in the system and there […]

IFAs have criticised Investlife&#39s high-income bond, saying they will not recommend it as returns are linked to the worst performing of eight stockmarket sectors.Investlife&#39s premier income and growth bond is being marketed as ideal for risk-averse investors as its capital return is linked to eight Dow Jones Europe Stoxx sectors.But IFAs say this claim is […]

Few companies can claim to have been shortlisted for the Money Marketing award for best use of new media three years in a row. Scottish Life has exactly that distinction, having collected the full set of silver, gold and bronze awards in 1999, 2000 and 2001 respectively.As I mentioned at the end of last year, […]

Scottish Widows Investment Partnership is to offer a property fund next month, offering investors a gross yield of 7 per cent a year.The UK balanced property trust will be an investment trust listed on the London Stock Exchange. The offer period is set to run from February 11 to March 20.Swip is looking to raise […]

According to Doug Rice, managing director of international services, in 2015, managing their international duty of care will become an increasing focus for UK-based overseas organisations in both managing their short- and longer-term challenges. As a result, strong independent advice and innovative technological solutions will become more important than ever in managing their global benefits.

Newsletter

Latest from Money Marketing

A group of 500 people have launched legal action against Ingenious Media saying they were misled about film investments that were later deemed to be tax avoidance by the government. According to Bloomberg, which cites court documents, employees from companies including Goldman Sachs, Lloyds Banking Group and HSBC are part of the action. British composer Andrew Lloyd-Webber is […]

Embark Services returned to profit in 2017 as it reported an increase in self-invested personal pension clients. Embark Services is a subsidiary of Embark Group that trades under the Hornbuckle and Embark brands. The business reported pre-tax profit for the year ending 31 December 2017 of £136,000 compared with a loss in 2016 of £2.4m. […]

Architas UK has seen inflows drop by just over 70 per cent in the first half of the year. The Axa-owned asset manager reported £152m net inflows for the first six months of 2018, compared with £546m in the first half of 2017. Globally, Architas’s net inflows dropped to €797m (£710.6m) in the first half […]

14th August 20182:45 pm

Comments

Leave a comment

Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.